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Fiona deposits $2,000 into a savings account. If the Fed requires a 20 percent reserve ratio, how much of Fiona’s money can the bank lend?
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2 votes
Fiona deposits $2,000 into a savings account. If the Fed requires a 20 percent reserve ratio, how much of Fiona’s money can the bank lend?

User Lilibeth
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9.0k points

2 Answers

3 votes
1800 dollar without the money creation multiplications
User Balaji Kondalrayal
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7.7k points
4 votes
1600 because the 20 percent keeps the bank from loaning the rest
User TheHube
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7.2k points
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